Representing a broad spectrum of
Australian, Hong Kong and international companies, The Australian Chamber of
Commerce (AustCham) has endeavored to make contributions to the economic,
social and sustainable development of Hong Kong over the past three decades. AustCham
has been representing views, values and interests of members to the Hong Kong
SAR Government to facilitate the growth and advancement of the city. AustCham
congratulates the success of the HKSAR in its 20th anniversary year and
appreciates the opportunity to provide our recommendations to the Chief
Executive’s Policy Address 2017 and The 2017-18 Budget.

We set out below our recommendations for
the areas of focus for the coming year.

Smart
City DevelopmentAustCham appreciates all the initiatives that
HKSAR has launched to take the city forward for smart development. We look
forward to more financial support and tougher standards to develop smarter and
greener buildings as well as increasing focus on energy efficiency in support
of the recently published Energy Saving Plan. Generally, smarter traffic systems
are needed, such as the Electronic Road Pricing (ERP), and smart meters for the
city’s three million electricity customers empowering them to reduce their
demand and better understand their energy consumption. The electrification of
transport should be continued to expand – more support should be raised for
electric buses and commercial vehicles such as tax incentives. The Government
also needs to develop and implement green labelling, green project accreditation
schemes, and public listing for green sector companies, adding climate and
environmental risks to the consideration of investment portfolios.

AustCham submits that the Government should
make a more holistic approach with top-down policy framework to facilitate
integration at the implementation level across different bureaus and
departments.

Innovation
and technology

The importance of innovation and technology
is being recognized by the HKSAR Government, and regulations have a critical role
in catering for innovation and new products and services which will ultimately
benefit the public. We encourage the Government to lead Hong Kong towards a Smart
City, by using evidence-based techniques to justify the best regulation,
promote a truly positive environment for innovation, protect foreign
investment, and ensure our people have the right to benefit from innovation in
a free market.

We hope that Hong Kong will become a world
leader in the regulation of innovative and disruptive products, not through
prohibition, but through world-class regulation based on sound science.

Technological innovation is transforming a
broad range of industries including finance, transportation and consumption.
One of the examples is in the tobacco industry where a wide range of
non-combustible tobacco products are becoming available which have the potential
to significantly reduce health risks and healthcare spending when compared to
cigarette smoking. High end technological innovation has played a key role in
gaining, at a large scale, acceptance and adoption to this type of new product
category. Innovative, scientifically substantiated, safer alternatives to
cigarettes for smokers who do not quit can hugely complement current efforts to
discourage smoking and reduce community impact.

Services and products that have benefits to
the society, economy and public health should be overseen by the Government
with appropriate regulations, therefore enhancing innovation and improving the
quality of Hong Kong people’s lives.

Education
and Talent

AustCham always welcomes continued
investment in the education sector as we see the importance of a well-educated,
trained and skilled talent pool for the city’s sustainable development. We
encourage the Government to continue to work with overseas investors and
education providers to establish their presence in Hong Kong. For the
international communities, AustCham applauds more affordable international
school places and for the local community, an improvement in students’ English
proficiency will help maintain graduates to better build the city as an
international metropolis.

Hong Kong’s
regional competitors are building sustainable pools of talent through tertiary
institutions - often in partnership with overseas universities or corporates.
Australia has a great record in tertiary education and AustCham encourages the promotion
of talent exchanges and partnerships between Hong Kong and Australia.

The Australia
Government’s New Colombo Plan, a signature initiative supporting Australian
undergraduates to live, study and undertake internships in the Indo-Pacific region,
has encouraged a two-way flow of talent between the county and the rest of the
region. Hong Kong is one of the host locations of the Plan, with around 15
scholars coming to Hong Kong every year. The Plan has deepened the bonds of
friendship and understanding between Australia and Hong Kong for several years,
and will continue to contribute to improving both countries’ education
standards.

We look forward to
more similar programs in the future, which encourage diversity and benefit
societies in both countries. We believe more government support is needed from
the policy perspective, say, reviewing the application requirements for
different visa types for overseas talent and the ongoing restrictions of
changing visa types.EnvironmentAustCham sees a clear need for proactive
policies in environmental protection in Hong Kong. With the community’s buy-in
to the costs involved, there needs to be a focus on energy, building,
transportation and waste-to-energy, supported by a long-term stable policy
framework, to enable action and forward planning by business.We urge the adoption of a 2030 Carbon
Intensity Target for Hong Kong and to lower carbon fuel mix for the electricity
grid with more gas and nuclear power, coupled with incentives for locally
distributed renewable energy in line with the community’s willingness to pay,
as well as for optimising the use of energy generated from waste. For example, the
waste heat from industrial processes could be used for desalination at power
plants.As Hong Kong stands to run out of land fill
space within a short time and pollution is at record highs, more transparent
and aggressive waste management strategies should be adopted, including
incineration with latest plasma technologies, recycling, redesigning charging
schemes and regional collaboration.Hong Kong’s per capita water usage is unsustainably
high. We believe there is a direct correlation between low water charges and
high consumption and believe with some directed policies and initiatives the
situation could be reversed. AustCham reiterates its call to consider
implementing more realistic price signals and water consumption levels.Biodiversity in Hong Kong remains one of the key
concerns of Austcham. The Government had a public consultation regarding this,
for which AustCham made a submission, and is drafting a strategic action plan
to sustain and improve biodiversity in the city. However, the business sector
remains lukewarm at best and still does not seem to make the connection or appreciate
this rather-difficult-to-understand area. Much more education, specifically in
helping companies appreciate the connection between business and effective
biodiversity is needed.Housing
Availability and Property AffordabilityOwning their own home is now an unaffordable
dream for many people in Hong Kong, which may breed disillusionment with our city
and our traditional values. Hong Kong’s average wage to house price ratio (x
15) is almost double the next highest in the world (Vancouver) and figures
suggest that even a 40-year old highly qualified professional who is born in
the city is not able to afford to buy his/her own home due to the high property
prices. Furthermore, the size of units being planned is not sustainable for
family life.AustCham encourages the Government to bring
forward proposals to increase the supply of both public and private housing and
to assist the many thousands living in sub-divided flats and cage homes. We
also suggest increasing the availability of private sector properties for rent,
noting that Singapore has removed the property tax concession for vacant
properties in 2014, but we understand this still applies in Hong Kong.Moderate prices and rents for housing and
property would also benefit the business prosperity of the city. Hong Kong’s
high land price and high rent may strongly discourage start-ups and innovation,
and they are one of the biggest concerns in the decisions of relocating talent
to Hong Kong as housing for staff consumes most of the operative capital of an
SME. AustCham fully supports a series of government measures to cool the
property market.Land
UseAvailability and affordability of land are
continued major constraints for business in the city. A new set of initiatives should
be announced in 2017 to expedite the re-zoning of former industrial land and to
bring forward the provision of brownfield rather than greenfield developments.Commercial
and Business DevelopmentRegional rivals and fast-growing competitors have
invested heavily in building capability in areas in which Hong Kong has
traditionally taken the lead, including financial services (Shanghai and
Singapore) and government’s support and help for small business start-ups (Singapore
and Shenzhen especially).To strengthen Hong Kong’s position as an
international financial hub, the Government needs to further develop the local
bond market and develop opportunities for the city as a part of the ‘Belt and
Road’ initiative with practical support and guidance on how local companies can
enter these new markets in Central and South-eastern Asia. AustCham fully
supports the establishment of the steering committee for the Belt and Road and
the Belt and Road Office. We believe Hong Kong can make full use of the dual
advantages of 'one country' and 'two systems' to seize the historic opportunity
of the Belt and Road.

To further promote social and economic
development of the city and enhance our competitiveness, AustCham also supports
Hong Kong to become a member of the Asian Infrastructure Investment Bank
(AIIB). It is estimated that in the next decade, the need for investments in
infrastructure across Asia will amount to US$10,000 billion, including those
devoted to fields of power generation, highways, railways, ports, transport,
telecommunication, and agriculture. Given the AIIB’s prospect and plans,
and with its advantage of “One Country, Two Systems”, Hong Kong can leverage its sophisticated financial and
professional services and its regional network to make the best possible use of
the enormous opportunities ahead.

Central to Hong Kong’s economic prospects is
our ability to nurture a new generation of enterprises. SMEs are the lifeblood
of thriving economies. The Government must continually focus on the ease of
establishing new and growing existing businesses, and provide the right
policies that are conducive to success. For example, the Government should
avoid the temptation to over-regulate. Dedicated support is also needed to cut
red tape, avoid the huge difficulties in issues like setting up a first time
bank account, broadening the tax base, double taxation agreements, and changes
to the tax regime to encourage more start-ups.AustCham will continue to work closely with
all Government bureaus and departments and support Hong Kong’s sustainable
development and prosperity. We appreciate HKSAR Government’s continuous efforts
to better the city we are living in. We are grateful for the opportunity to
submit our ideas and suggestions in the Chief Executive’s Policy Address 2017
and 2017-18 Budget Consultation.